1. Field of the Invention
This invention relates to a software system for employers"" determination of compensation levels for employees.
2. Description of the Related Art
In many fields, such as the construction industry, where contractors utilize field employees to provide a wide variety of customized services to various customers, it is often difficult to determine a level of compensation for the field employees that is closely correlated with the particular services performed by each employee, is sufficiently rewarding to efficient, productive employees to maximize employee retention and maximize efficiency, is correlated to and within the employer""s costs for providing the services, and is appropriately adjusted to take account of over-time worked by the employee to meet government requirements. Paying employees strictly on a per hour basis tends to reward employees who take a long time to perform a service rather than rewarding efficiency, and payment that is not tailored to the value of the particular service or for extra services tends to result in lower employee performance levels.
Attempts have been made to overcome these limitations. In some fields, contractors make payments on a per hour basis, plus additional payment for extra services, such as in return for a customer lead (commonly known as a xe2x80x9cspiffxe2x80x9d) and for over-time. Some companies rely heavily on bonus cash payouts to motivate workers who are otherwise paid relatively low salaries. Other attempts based somewhat on a traditional piece-work system must be carefully monitored so that the amount paid meets minimum wage and overtime requirements. Piece-work rewards volume of work and not quality of work.
The performance-based pay system of Tom McCart (Contracting Business, March 2001, pages 52-5) utilizes production goals determined from sales projections and geographic area information, along with technician self-tracking to measure and compare technician""s performance and other employee motivational techniques, to determine pay raises.
In order to be sure of their costs of providing particular services and to aid in determination of how much to charge customers, some industries such as the plumbing industry and the HVAC industry have promulgated detailed flat-pricing databases containing thousands of estimated costs of labor and materials for particular projects. Thus, a plumbing and HVAC contractor can consult the databases to obtain an estimated cost for a particular repair or installation having a specific assembly, with information generally provided based on the material and labor unit cost. The contractor can use this cost estimate and make a determination of what to pay the employees, assuming that the work will all be done at a standard non-overtime rate; however, the employer must be careful to monitor the actual amount of time that the employees work to be sure that the minimum wage is paid and that appropriate overtime pay is paid. This system does not provide any mechanism for rewarding employees who are more efficient and do better work than average employees. This system can work with any trade""s material and labor database.
It is therefore an object of the invention to provide a system for employee compensation that revolves around the employee performing service work and being subsequently compensated with a premium based on performance. Performance as used here includes work performed expediently and properly the first time. With the system of the invention, high performing employees can routinely make 20-30% more than other employees, while at the same time, the employers"" profits are increased.
Other objects and advantages will be more fully apparent from the following disclosure and appended claims.
The invention herein is a payroll system and method for determining compensation of employees for work during a pay period on any of one or more projects. The invention utilizes a base employee compensation amount and a unit rate compensation amount for each employee, and compares the difference between these amounts for each employee with the outstanding debit account amount for that employee, and then determines the employee""s pay for the pay period and whether the employee""s debit account amount should be adjusted. Additional optional modules are provided in the invention that may be used for other employer business operations.
Other objects and features of the inventions will be more fully apparent from the following disclosure and appended claims.